Victrex has insisted its balance sheet has been “robust” as it looks to turnaround a recent share slide.
The FTSE 250 firm, which makes polymers designed to support CO2 reduction, said net debt as of 30 June was around £10m lower than at the half year as cash generation improved during the quarter.
Year to date group revenue came in at £213.3m, nine per cent lower than the prior period and reflecting lower gains in its medical segment. It is expecting to spend £35m on capital expenditure through the year, a figure unchanged from previous guidance.
It comes after a difficult first six months in 2024, which saw shares fall over 24 per cent against a challenging backdrop, particularly in its Medical business.
Jakob Sigurdsson, Chief Executive of Victrex, said: “With continued momentum in some end markets, we remain focused on our goal of a better second half year. However, high inventory levels and industry destocking amongst major medical device customers continue to be challenging for our Medical business. At this stage, Medical performance is tracking lower than our expectations for the second half year.
“On a full year basis, our volume guidance is unchanged and we continue to expect low to mid single digit volume growth. At a profit level, destocking in Medical and ongoing lower asset utilisation continue to be headwinds, with currency rates starting to move adversely in the second half.
He added: “Unless Medical improves above current run-rates, the opportunity to deliver a slightly better pre-tax profit performance in H2 2024, versus H2 2023 – in line with our previous guidance – will be challenging.”
Medical has seen “no visible signs of improvement” yet, Victrex said in a statement to markets, although it noted growth in surgery rates, “which enables us to be well positioned for when the destocking cycle ends.”
Victrex will report its full-year 2024 preliminary results on Tuesday 3rd December, 2024.